The government will clear pending GST refunds of Exporters by November-end
and over the next six months no tax will be levied on exports as the Council
has decided to revert to the pre-GST era, Revenue Secretary Hasmukh Adhia said.
Over July-August, an estimated Rs 67,000 crore has accumulated as the
Integrated GST (IGST), of which only about Rs 5,000-10,000 crore will be due as
refunds to exporters, he said in an interview to a news agency.
While no tax will has to be paid on goods to be exported in the remaining
months of current fiscal, from April 1 an e- wallet service will be launched
that will give exporters notional credits that can be used to pay GST, he said.
The credit in the wallet would be transferable.
The Goods and Services Tax (GST), the amalgamation of over a dozen indirect
taxes like excise duty and VAT, does not provide for any exemptions, and so
exporters are required to first pay Integrated-GST (IGST) on manufactured goods
and claim refunds after exporting them. This put severe liquidity crunch,
particularly on aggregators.
o ease their problems, the GST Council on Friday decided a package for them
that includes extending the Advance Authorisation / Export Promotion Capital
Goods (EPCG) / 100% EOU (Export Oriented Unit) schemes to sourcing inputs from
abroad as well as domestic suppliers till March 31, thus not requiring to pay
For a period of 6 months we are actually reverting back to the pre-GST
scenario (where manufacturing exporters or those who manufacture goods for
exports did not pay any tax). So, they have no reason for any complain now,” he
A nominal 0.1 per cent tax will be levied on merchant exporter as they
themselves do not manufacture. Under GST even a merchant exporter who collects
goods from many producers and exports has to pay full rate of duty and seek
refund. But, he is only an aggregator. So, that was the problem and it has been
sorted out, he said.
The refunds to exporters would be settled, and resolved in a month or two”.
After March 31, there will be a system of e-wallet, where a notional credit
will be made into the holder’s account so that the same could be used for
payment of GST after March 31st.
The credit would be made to exporters based on their past performance or on
the basis of export orders in hand, he said, adding this would mean no hard
cash is spent on taxes.
It is possible that the manufacturing exporter himself has no liability to
pay, but the supplier who gave him inputs may have. So, he can transfer credit
(from e-wallet) to the supplier account. So, the e-wallet would be
transferable, just like any other wallets, but the only restriction is that it
can’t be given in cash, it can be only used for payment of duty,” he said.
After executing the export order, a refund application will have to be made
and the refund will be credited in form of credit to the same e-wallet.
So, his account will get replenished by the refund. So, the refund process
will take place, but he is not deprived of funds and will not have to invest
his own working capital. Liquidity will be maintained with him,” he said.
Adhia said with these measures, issues faced by exporters have been taken
care of. “It’s an innovative idea that we have come out with, while not
compromising on GST’s basic structure wherein ideally exemption should be
On refunds on taxes paid already paid since introduction of GST in July, he
said the rules provide that if IGST is paid on export, immediate refunds should
be made. But, since that system is not ready, the refund claims of July totalling
about Rs 600 crore will start from October 10 and another Rs 800 crore for
August from October 18, he said.
However, for claiming the refunds, exporters have to fill Table 6A while
filing GSTR-1 for July, August and September.